As most know setup.exe enables
you to change resolution, color
texture, audio etc. My problem
is I set the resolution to 3840 x 2160
(I now have a 4K monitor HDMI 2.0 4K @ 60Hz)

When I am in setup.exe it is indeed at
the required resolution - however when
playing Mafia the game is running at
2560 x 1440. I am using Mafia Widescreen
Fix; whether this is the cause I have no
idea. Is there anyway to rectify this problem
please.

Come to think of it the game is stuck at
2560 x 1440 res; can't even decrease to
1920 x 1080

Have you already tried to run the game without Widescreen Fix? Maybe the mod overrides the game's resolution and you need to configure it via the mod's config file.

Another point that comes to mind is registry virtualization. Typically Windows Vista+ runs the game's setup.exe as elevated process as it assumes it's an installer. The game however runs as regular process (unless you explicitly specify Run as administrator) and hence it might access a user-specific (i.e. virtualized) version of the setup key in HKCU while setup.exe writes to HKLM. To solve that you could either rename setup.exe to something else (like setu_.exe) to circumvent Windows' installer detection heuristic and run the setup as regular process or run the game as elevated process, too.

ASM: thanks for that I did indeed rename the setup.exe
to setu_.exe and that did the trick. Now for interest's sake
playing Mafia at 4K resolution is not the same as UHD quality
just means you are playing at a higher res than the game
is used to so tbth it is not actually 4K._________________